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Capital Project Delivery

Risk
Management

Summary

Risk Management is
a process that enables
project sponsors and project
team members to make informed
decisions on project-related
risks.
The New Jersey Department
of Transportation (NJDOT)
has developed a series
of guidance documents that
help to proactively manage
risks over the
life of the project.

Objectives

The process goal is to ensure that
project risks are proactively
managed over the life of
the project. Accomplishing
this goal helps to eliminate
re-work, minimize
design changes
and ultimately minimize
the cost of the project
and the time required to
complete the project.

Major Tasks

The Risk Management Process has
five key components:

Risk Planning: Deciding
how to approach, plan
and execute the risk
management activities
for a project.

Risk Identification: Determining
which risks might affect
the project and documenting
their characteristics.

Risk Analysis: Prioritizing
risks for further analysis
or action by assessing
and combining their
probability of occurrence and magnitude
of impact.

Products

Risk Register

A Risk Register is a tool that
the Project Manager and Designer
can use to address and document
project risks throughout the project
life cycle. It is a living document
that includes a comprehensive listing
of risks and the manner in which
they are being
addressed as part of the Risk Management
Process.

Major Risks (within the Alternatives
Matrix)

Within the Alternatives
Matrix, the Major Risks
are listed for each alternative
so that risks can be considered
when selecting the Preliminary
Preferred Alternative (PPA).
Major Risks specific to
each alternative should
not be included within
the Risk Register. Once
the PPA is selected, the
Major Risks for the PPA are transferred
to the Risk Register to
calculate probability and impact.

Utility Risk Assessment Plan

Based on the field inventory, the
Designer assesses the project limits
for potential high risk utility
impacts and notes those impacts
on the Utility Risk Assessment Plan.
This plan will be utilized to complete
the utility section within the Project
Fact Sheet.

Quantitative Risk Analysis Worksheet
and Report

Quantitative
Risk Analysis is a way
of numerically estimating
the probability that
a project will meet its
cost and schedule objectives.
If approved by the Project
Manager and concurred
with by the Program Manager,
the Designer performs
Quantitative Risk Analysis for
projects with a total construction
cost over $100 million during
Concept Development. Quantitative
Analysis may be performed on projects
under $100 million if necessary
as determined by the Project Manager.

Utilizing the Quantitative
Risk Analysis Worksheet,
the Designer includes each
major risk for each alternative.
For each risk that is added
to the worksheet, the Designer
calculates the probability
of occurrence and magnitude
of schedule and cost impact.
For each risk that has a
high or
very high probability of occurrence
and a high or very high magnitude of
impact, the Designer performs Quantitative
Risk Analysis. Quantitative Risk Analysis
results in a more accurate estimation
of probability of occurrence and a numerical
value in days of schedule impact and
dollars of cost impact. The Quantitative
Risk Analysis is documented in the Quantitative
Risk Analysis Report.

Risk Summary (within
the Concept Development
Report)

A Risk Summary section
is included within the
Concept Development Report
that documents the risk
management efforts conducted
during Concept Development.

Risk Summary (within
the Preliminary Engineering
Report)

A Risk Summary section
is included within the
Preliminary Engineering
Report that documents the
risk management efforts
conducted during Preliminary
Engineering.

Risk Report (within
the Final Design Submission)

A Risk Report is included
within the Final Design Submission
that documents the risk management
efforts conducted during
Final Design.

Some of the files below are in
Portable Document Format (PDF).
You will need Adobe Acrobat Reader,
which is available free from the
state Adobe
Access page, to view the files.